What Exactly is the H-1B Visa Program, and How is Trump Changing It?

On Friday, President Trump expanded his aggressive stance on immigration, targeting a visa program for skilled foreign workers. He enacted a new rule imposing a hefty $100,000 fee on all new applications for H-1B visas, which enable international professionals, including software engineers, to work in the U.S.

The H-1B visa program was originally created to assist American companies in filling specialized roles when qualified U.S. workers were unavailable. However, it has been a long-standing point of contention for immigration hard-liners and far-right groups, who claim it enables businesses to substitute American jobs with foreign labor. This debate has even caused rifts among Mr. Trump’s own base, and his personal views on the program have evolved over the years.

Before signing the new proclamation in the Oval Office, Commerce Secretary Howard Lutnick articulated the administration’s justification for the new fee, labeling the H-1B as the “most abused visa” program.

Lutnick stated, “The core principle is that major tech and other companies will no longer simply train foreign workers. They will now be required to pay the government $100,000, in addition to the employee’s salary, making it economically unfeasible. The aim is to incentivize companies to invest in training recent graduates from American universities instead.”

This new fee is expected to trigger legal challenges. According to a Saturday memo from U.S. Citizenship and Immigration Services, it is scheduled to take effect on September 21st and will apply solely to new visa applications.

Here’s a breakdown of the program and its changes.

What Exactly is the H-1B Visa Program?

The H-1B program was established by Congress in 1990 in response to anticipated labor shortages. President George Bush, upon signing the legislation, emphasized its purpose: to “encourage the immigration of exceptionally talented people, such as scientists, engineers and educators.”

These visas, which are initially valid for three years and can be extended, have been utilized by employers to bring in foreign professionals with specialized expertise, predominantly in scientific and technological fields. The underlying rationale is to fill positions where qualified American workers are not readily available.

The process involves employers submitting a petition to the government, detailing the job role and the qualifications of the prospective foreign employee. While an H-1B visa grants temporary work status, not immediate residency, it often serves as a stepping stone. Many employers eventually sponsor their H-1B workers for a green card, leading them toward U.S. citizenship.

Significant confusion arose over the fee’s implementation. While Secretary Lutnick initially stated on Friday that the $100,000 fee would be an annual charge for American companies hiring foreign workers, White House Press Secretary Karoline Leavitt later clarified via social media that it would be a one-time payment.

Who Exactly Benefits from the H-1B Program?

Each year, Congress allocates 65,000 H-1B visas for individuals holding a bachelor’s degree or its equivalent, with an additional 20,000 reserved for those with a master’s degree or higher. Notably, universities and research institutions are not subject to these annual limitations.

The majority of H-1B visa recipients are software engineers, computer programmers, and other professionals within the tech sector. Data from U.S. Citizenship and Immigration Services indicates that giants like Amazon, Google, Meta, Microsoft, Apple, and IBM were among the top employers of H-1B visa holders last year. However, the program also supports workers in diverse fields such as education, healthcare, and manufacturing.

There are no country-specific limits on H-1B visas, resulting in a significant concentration from a single nation: India, which accounts for approximately two-thirds to over three-quarters of all recipients.

On Saturday, India’s Ministry of External Affairs publicly voiced concerns, highlighting the strong ties between India and the U.S. and warning of potential “humanitarian consequences” for families due to these sudden policy shifts. It’s common for H-1B visa holders to bring their spouses and children to the U.S., who often reside there for decades on dependent visas.

Why Do Some Republicans Criticize the H-1B Visa Program?

According to fwd.us, an immigration advocacy group, approximately 730,000 H-1B visa holders reside in the U.S. This figure represents a minor portion of the overall U.S. workforce, which totaled over 163 million people as of September.

Opponents of the visa program argue that U.S. employers frequently leverage H-1B visas to employ foreign workers who will accept lower wages compared to American applicants for identical roles. This critique is particularly strong among Republicans who support Mr. Trump’s firm immigration policies.

Conversely, some notable supporters of Mr. Trump lead major tech companies. These companies heavily depend on H-1B workers, citing a scarcity of qualified American talent for many specialized positions.

The introduction of this new fee has caused widespread disruption and uncertainty across various industries, though its impact is expected to be most severe on the technology sector.

Do H-1B Visa Holders Truly Replace American Workers?

To secure an H-1B visa, government-designated “H-1B dependent” employers must affirm that they have first sought qualified American candidates. They must also guarantee that hiring an H-1B worker will not negatively impact the wages or working conditions of U.S. employees.

Indeed, there have been instances where the program was reportedly used to bring in foreign workers for positions previously held by Americans. A notable case occurred in 2015 when approximately 250 tech employees at Walt Disney World in Orlando, Florida, were informed they would be laid off and were required to train their H-1B visa-holding replacements, who were brought in by an Indian outsourcing firm. Similar situations impacted employees at Toys “R” Us and the New York Life Insurance Company during the same year.

Employers are mandated to pay H-1B workers at least the prevailing wage for their specific job and location, or the average wage earned by American-born workers in comparable roles. While companies are explicitly forbidden from underpaying H-1B workers compared to their equally skilled American counterparts, a 2019 study by the Economic Policy Institute revealed that approximately 60 percent of these positions offered salaries “well below” the local median wage for the occupation. The Institute attributed this discrepancy to the Labor Department’s “broad discretion” in determining H-1B wage levels.